Y&A Framework: Dentistry

GETTING STARTED

RUNNING YOUR BUSINESS

4

Business Incorporation

5

Bookkeeping: QuickBooks

6

Accounting Calculator

7

Corporate Taxes

TREND & STRATEGIES

8

TREND & STRATEGIES

GETTING STARTED

What’s New?

A dental office provides patients with routine and non-routine, preventative and corrective dental care. Dental office is a necessary business in a local community because their procedures help ensure patients stay healthy. As a dentist, your goal is to help your patients achieve a perfect smile, in more ways than one. Keeping your patients happy is the best way to encourage customer loyalty so you’re never struggling to fill an empty chair.

Whether you are fresh out of dental school or have been a practicing dentist for a couple of years now, if you are wondering how to get started on venturing out on your own , this framework is for you. Here we cover the necessary steps to get started, provide extensive details on the business options available for a dental practice, give an overview of what running a dental practice will encompass, strategies to run your practice efficiently, and future trends to look out for.

Education

To become a licensed dentist in Canada, graduates of accredited dental programs must successfully complete the National Dental Examining Board of Canada's (NDEB) Certification Process.

NDEB certification or components of the certification process are also being accepted for licensure in the following states:

Colorado

Minnesota

Washington

General Dentistry

There are two pathways to certification as a General Dentist in Canada for graduates of non-accredited general dentistry programs

Successful completion of an accredited Qualifying/Degree Completion Program

Successful completion of the NDEB Equivalency Process

A Bachelor’s Degree in General Dentistry is limited to: tooth extraction, tooth fillings and oral prophylaxis.

Graduates of Non-Accredited Dental Specialty Programs

Graduates of non-accredited dental specialty programs who are interested in becoming licensed specialists in Canada can apply to take the Dental Specialty Core Knowledge Examination (DSCKE). The DSCKE is used by Canadian faculties of dentistry as part of the admission process for entry into Dental Specialty Assessment and Training Programs (DSATPs). DSCKE results are automatically sent to Canadian Faculties of Dentistry that offer DSATPs.

Applicants must be graduates of a dental specialty program from a university that is sanctioned by the government of the country in which it is located to award such degrees.

RCDC = Royal College of Dentists of Canada | NDSE = National Dental Specialty Examination

Specialization is key to set yourself apart from the offices in the area. Most dentists are generalists. In a highly competitive market, this makes it difficult to separate yourself from the competition. Specialization allows you to charge more and have a more defined niche.

Doctorate in Dentistry has specialization with one or more of the following:

Orthodontics and dentofacial orthopaedics

Paediatric dentistry

Prosthodontics

Periodontics

Oral and maxillofacial surgery

Endodontic

Core Staff in a Dental Practice

Day-to-day activities in a dental office include checking patient charts, meeting with patients and checking hygienists’ work after a routine dental procedure. Most dental offices also staff billing and HR personnel who are responsible for managing the day-to-day affairs of the office, including the financial aspects like patient billing.

Dental offices typically consist of the following:

One head dentist ($76.82 or $120 to $142K)

A few hygienists ($36.57 to $42.96)

Receptionists. ($27,370 to $49,973

When starting a dental office, you’ll need at least a minimum “core staff” to cover essential services. In addition to the core dental staff, billing and HR are also usually necessary to assist in managing financials and staffing.

Business Plan

Buying a dental practice can seem overwhelming especially since the prices have been climbing over the last decade, typically doubling in comparison to a decade ago. This is because there simply is not enough supply; more foreign dentists are immigrating to Canada and buys a practice, emergence of investor dentists, who own multiple practices and lastly dentists working longer and retiring later than was typical in the past. Average cost is anywhere from a few hundred thousand dollars to over a million dollars depending on location, size, financial health, and a number of other parameters.’

Starting up your own may be challenging, the average cost of starting a dental practice is $350,000 to $550,000. The reason the range between these two numbers is so large is because the cost of opening a practice varies widely based on the practice's region and square footage.

$120 per square foot = 2,000 square foot office this can cost $240,000, aside from that you need to invest on dental equipment like Dental Chair ($2000 to $6000), X-ray system ($62,000 to $140,000), Laser drills ($1k per quadrant), CEREC single visit crowns ($48,995.00), VELscope Oral Cancer screenings and other equipment are often leased by offices, because their real costs are in the mid six digit range.

Before buying an established dental practice

You need to take into consideration the following:

Cash flow

Look to the past few years of income documentation to get a better idea of what to expect, existence of patient is also important.

Supplies

Tech equipment, repairs, inventory and supplies.

Lease

Review how rent expenses may have increased over the past few years and any tax/insurance totals that come along with it. Property fees can sometimes conceal hidden expenses that cause problems in the long run.

Transition

Purchasing an existing client base is great. However, As each dentist have their own philosophy and unique way. Establishing communication as early as possible may help.

Primary considerations when starting your own dental practice

It is certainly tough to build something from the ground up, but the long-term reward of having a business that is outfitted to your personal values and taste could outweigh buying an existing practice. In building your dental practice from scratch, your leadership skills will be harnessed and you will be able to make executive decisions on office policy and staffing. But before you take the plunge and do the calculations needed to start your own, make sure that you also include these aspects in your computations:

Location

Your main objective here is to obtain a location that is as reasonably low in cost while simultaneously supporting your growth goals. Specifically, low cost areas with accessibility to your target market.

Size

The number of chairs you expect to accommodate will have a very large influence on the decision of square footage.

Bank Rates

Consider the loan term, pre-payment details and lender service level. Lowest rate may seem like the most logical option, do not be fooled. Low flexibility, restrictive payment cycles and unexpected first year costs could land you in unnecessary financial stress.

The team

Start with contractors so you will have the opportunity to carefully handpick the staff that will join you.

On top of these main entries to go into your financial plan, it is wise to find quality mentors, business advisors, and lawyers that understand the intricacies of opening up a practice. Running a business is more than clinical work that you trained for. Therefore, surrounding yourself with business professionals with valuable experience in the field greatly helps you find your footing in a highly competitive market.

Strategies

You don't just track statistics; ask yourself what does your team do with the information? How do the numbers help you with your job, your practice, and your patients? Make sure your team understand the impact of the goals you are setting. Implementing these strategies in your practice could maximize your net worth.

Over the counter collection percentage - The OTC is a good way to track co-pays, goal of 35%. Your money is worth more today than it is in 30 days or 90 days from now.

Number of new patients seen - The average practice may lose as much as 10% of its patient base through normal attrition. Set a goal of 15% growth in order to achieve actual growth. Follow up with patients who have left ask them why they transferred. If it’s due to something you can prevent in the future, learn from that opportunity. The ideal for each dentist is eight to 12 patients a day.

Number of cancellations or no-shows - Offices frequently do not have real statistics to share, only "a feeling" by the doctor or staff. Every no-show patient costs money that cannot be adequately recouped by charging a cancellation fee. Tracking this number is essential, set goals and find ways to limit it.

Ratio of treatment presented vs. Treatment Accepted - A good benchmark is an acceptance ratio of 70% to 80%. So why is it important to track your case-acceptance rate? It’s because these are high-profit, high-margin cases for you and it’ll test how well you and your staff communicate with your patients.

Ratio of unscheduled units for doctor and hygienist - This statistic will determine how efficiently you are scheduled. You may have surplus capacity, which may mean you're overstaffed. The industry standard is that the hygienist should make in wages about 33% of her production, and also should produce about one third of the total production.

Number of new-patient phone inquiries compared to appointments set - The effectiveness of your advertising and marketing can be tracked to the number of new-patient phone inquiries compared to the number appointed. Though, your front desk is still your most effective marketing salesperson!

Other strategies that you may employ to increase patient loyalty and retention is to do patient follow ups and direct mail and have a procedure in on-boarding new patients. In order to reach former patients, you can marketing channels such as social media, email, and direct mail to encourage them to make an appointment.

Primary considerations when starting your own dental practice

It is certainly tough to build something from the ground up, but the long-term reward of having a business that is outfitted to your personal values and taste could outweigh buying an existing practice. In building your dental practice from scratch, your leadership skills will be harnessed and you will be able to make executive decisions on office policy and staffing. But before you take the plunge and do the calculations needed to start your own, make sure that you also include these aspects in your computations:

License and Permits

Requirements

University degree in dentistry that proves the successful completion of at least four years.

Certificate of the National Dental Examining Board of Canada (NDEB), issued before January 1994, or successfully completed the NDEB examination.

Since getting your NDEB certificate, continuous practitioner of dentistry on a regular basis in Canada, the U.S., Australia or New Zealand for a period of more than three years.

You demonstrate the ability to speak and write English or French with reasonable fluency.

You have successfully completed the RCDSO’s Jurisprudence and Ethics course.

You are a Canadian citizen, permanent resident or have authorization under the Immigration and Refugee Protection Act to work in a health profession in Canada.

Currently or have not been disciplined, suspended, had your licence revoked or the subject of a finding of professional misconduct, incompetence or incapacity.

You have not been charged and/or convicted of a criminal offense in any Canadian or international jurisdiction.

Business Incorporation (Ontario $300, Federal $200)

RUNNING YOU BUSINESS

Incorporating the Business

A dental practice could be run as a sole proprietorship or limited partnership, or as a corporation. One highlighted difference is Corporation is a separate legal entity, which provides you limited liability or personal asset protection.

If you want to see if incorporating your business is the right direction for you.

Manage your receivables with QuickBooks

Did you know that you only have 20% chance of collecting accounts once they go past due for more than 90 days? Aim to collect your patient receivables below 30days. A good goal is 70% collection within 30days.

Levin Group client research shows that the average cost of sending a bill to a patient is $4.50 when you combine staff time, mailing, and supply costs. If a patient becomes significantly delinquent on his or her account for a period of 90 days and your practice sends bills monthly, that is a further $13.50 cost per patient just in billing.

Use Accounting software, Y&A recommends QuickBooks as it allows you to view all your patients with their balances all at the same time. You can also track the how long or aging the invoices are.

Numbers tell a story, use the numbers to help write the next chapter and deliver an ending that is more predictable. Reports are your reward for all that hard work you put in entering records and transactions in QuickBooks.

Production Calculator

Total Production ÷ Number of Patients = Average Production per patient

If your dentists have patients the whole day, that doesn’t mean your practice is profitable. Producing the maximum dentistry to each patient is much important.

30 Patients a day | $120 production per patient | Profit $3600

20 patients a day | $220 production per patient | Profit $4400

The daily difference of $800 accumulates an additional income of $160,000 in a year for a practice scheduling 4 days a week. The dramatic difference in revenue and profit is due to the fact that the "slower" practice has the time to present, sell, and deliver more comprehensive dental care. Calculate your practice’s average production using the calculator below.

Improve your Case Acceptance rate

Your target should be 70-80 percent, and you can measure this each day by having your staff track case acceptance. Tracking and monitoring is an important exercise, since it will keep your focus - and your staff's focus - on this critical area for growth.

Use a written fee presentation form - Make the presentation clear and simple for both you and your patients. Let your patients see exactly what their options are in writing. They will understand and retain more, making it easy for them to decide which option works best for them. Should your patient want to discuss finances with a spouse, she can bring home one simple form that contains all of her payment information.

Offer the same payment options to everyone - Many people prefer to spread payments over time instead of making a lump-sum payment. If a staff member asks your patient, "How would you like to pay, by check or credit card?" you are losing patients for financial reasons. Given these limited options, many patients quietly panic and postpone their decision. These patients walk out and may not come back. Presenting two to three options will address nearly everyone's needs and maximize your case-acceptance rate.

Preset the "no initial payment option" first - Eliminate the financial barrier and put your patients at ease. Begin by letting them know that they can start treatment without the need for an initial payment. patients who prefer to pay you in full right away will do so, patients will appreciate you for making treatment easy and affordable for them.

Let your patient choose - Once you've presented all of the payment options, ask your patient: "Which of these options works best for you?" Your patient will choose which option is best for his or her situation.

With the right payment choices presented in the right way, your patient's mindset will quickly change from "Can I afford this?" to "When do we begin?" The best way to make this decision easy is to give your patients attractive payment choices. One system that patients will appreciate and take advantage of is a 5 percent courtesy reduction on complete treatment fees when they pay in full upfront.

Every business needs to file their corporate taxes, whether they were actively engaged in business or not.

Understanding Financial Reports

Financial books follow standards for accuracy, tax laws and regulations, and accepted practices. Tax reporting agencies expect that the books submitted to them follow these standards. A company can learn a lot about their financial health with this financial information. Understanding the significance of these numbers can help a company realize better earnings, additional savings, and improved operating efficiency.

TRENDS & STRATEGIES

The Selfie Generation

Canadian dentists who take advantage of the current obsession with selfies can win new patients by offering cosmetic treatments that are more affordable for the younger working public. These treatments, such as teeth whitening and instant veneers, appeal to those in these demographic, particularly young women.

Emotional Dentistry

To become a licensed dentist in Canada, graduates of accredited dental programs must successfully complete the National Dental Examining Board of Canada's (NDEB) Certification Process. With virtual mock-ups and digital photos, patients can envision themselves with their final restorations. This not only boosts the trust of the patients but also makes them emotionally committed to the outcome.

And unlike before, patients now get a chance to try different smiles and choose whatever looks most appealing to them. This is completely opposite to what used to happen traditionally, and this whole procedure is simply life changing.

Digital System Expansion

Dentists that use digital impressions, 3-D printers, aligners, smart sterilizers, or practice holistic dentistry are seeing an upsurge in new patients. Dentists who stay ahead of the curve and provide patients with these new options not only provide a better patient experience, these technologies make dental appointments shorter and allow more patients to be treated within the same time frame – a worthy investment.

Younger patients are particularly tech-savvy and appreciate the most advanced treatment options. They expect digital X-rays and are attracted to technological amenities such as screens at every dental chair.

Aging teeth of Baby boomers

The burgeoning elderly population will change demographics in Canada, and as a result, spur demand for restorative, cosmetic, periodontal and orthodontic care, boosting industry revenue